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The Senate’s Blockbuster Spending Deal

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The Senate has reached a budget deal. Senate Majority Leader Mitch McConnell and Minority Leader Chuck Schumer on Wednesday announced a bipartisan agreement on a budget that would boost federal spending by $400 billion or more over two years. Bloomberg reports that the increased spending would be partially offset by cuts to mandatory spending programs, according to the Republican summary.

The deal, if it can overcome opposition from both conservatives and liberals in the House, would avert a government shutdown on Friday by funding the government through March 23. That would provide time for lawmakers to flesh out legislation for the longer-term spending framework. The deal would also end — at least for a while — the prolonged congressional cycle of fiscal standoffs and short-term spending patches.

“After months of legislative logjams, this budget deal is a genuine breakthrough,” Schumer said on the Senate floor. “After months of fiscal brinkmanship, this budget deal is the first real sprout of bipartisanship and it should break the long cycle of spending crises that have snarled this Congress and hampered our middle class.”

The deal announced by McConnell and Schumer would:

Defense: Increase defense spending over current law by $80 billion in fiscal 2018 and $85 billion in fiscal 2019, pleasing defense hawks who have called for increased funding and stability in the military budget.

Non-defense: Increase non-defense spending by $63 billion this year and $68 billion in fiscal 2019, including $20 billion for infrastructure, $6 billion to fight the opioid epidemic and fund mental health programs, $5.8 billion for the Child Care Development Block Grant program, $4 billion for the VA and $2 billion for the NIH.

CHIP: Extend the reauthorization of the Children’s Health Insurance Program to 10 years and provide funding for community health centers.

Medicare: Repeal the Independent Payment Advisory Board (IPAB), a Medicare cost-cutting group created by the Affordable Care Act.

Debt ceiling: Suspend the debt ceiling, reportedly for one year.

Immigration: Leave divisive immigration issues, including the fate of hundreds of thousands of “dreamers,” unaddressed, a potential sticking point for many House Democrats.

But House conservatives are objecting to the spending increases, and Democratic Leader Nancy Pelosi set a record with a marathon speech — seven hours and counting — demanding that Republicans hold votes on legislation to protect immigrant “dreamers.”

The bottom line: The House, which passed a stopgap spending bill Tuesday, could still reject this deal, unleashing a chaotic scramble to keep the government running, but with midterm elections looming, enough lawmakers from both sides are likely to line up behind the deal and end the prospect of further shutdown drama.

As editor in chief, Yuval Rosenberg oversees all aspects of The Fiscal Times' website and email newsletter. His writing has appeared in publications including BusinessWeek, CNBC.com, CNNMoney.com, Fast Company, Fortune, Newsweek, Money and Time.